News

06/12/2017

Springfield City Council has lots of questions on proposal for MGM to switch sites for market rate housing commitment

City councilors raised a lot of questions Thursday and said they will have many more as they consider a proposal by MGM Springfield to invest in a potential $40 million housing/mixed-use redevelopment at historic 31 Elm St. as part of its commitment to bring market rate housing in the downtown.

During a meeting at City Hall lasting more than 90 minutes, representatives of OPAL Real Estate Group, WinnDevelopment, MGM Springfield and the city spoke of their proposed partnership to restore the long-vacant six-story building at Court Square.

MGM is proposing to invest $11 million in that private project as part of its commitment to bring 54 units of market rate housing to the downtown area under its host community agreement with the city. The agreement ties in with MGM Resorts International's $950 million casino project, scheduled to open in the fall of 2018.

Michael Fenton, chairman of the City Council's Casino Oversight Committee, said he believes it would be fair to extend the time for MGM to complete its housing obligation to the city due to the new idea of using 31 Elm St. as part of that commitment.

"Everyone has an interest in seeing that site developed," Fenton said. "We'll conduct our due diligence."

Council President Orlando Ramos said there will be a careful review.

"There is a lot of information to process and I will be needing some time to make an informed decision," Ramos said. "My initial reaction is that it is a great opportunity for the city to develop a property that is in much need for development."

Councilors raised questions about proposals to take private property in that area, possibly by eminent domain, to create additional space for parking. They also raised questions about the previous site targeted for by MGM Springfield for market rate housing, the former school headquarters building at 195 State St.

Ramos said he has some questions about whether or not the amount of money that MGM is proposed to contribute to the Elm Street project is fair, in comparison to what would be committed elsewhere to meet the housing obligation.

The change needs approval from the council and Massachusetts Gaming Commission, but MGM representatives stressed that it is city leaders asking the casino company to help with the Elm Street building, which sits vacant across Court Square from Springfield City Hall.

Kevin Kennedy, the city's chief development officer, said there is a plan for MGM to turn over the MGM-owned State Street building back to the city, at no charge, for the city to pursue a new housing development there by a future interested developer. MGM bought the building 14 months ago for $600,000, and the city had previously seen at least two failed redevelopment attempts at the site.

Kennedy said the redevelopment of 31 Elm St. is critical for the Court Square area.

Representatives of OPAL Real Estate Group, which is the chosen "preferred developer" for the 31 Elm St. site, in conjunction with WinnDevelopment, said the assistance of MGM is critical for the housing project to proceed.

All prior efforts for the site in the past five years were deemed to be economically unfeasible, according to representatives of both companies.

The proposal for 31 Elm St. is for commercial and retail uses on the first floor and about 60 units of housing on the upper five floors, officials said.

That is expected to include 48 units of market rate housing and 12 units of workforce housing, tailored for tax credits and designed to make it affordable for workers in the downtown, such as MGM employees and city employees, officials said.

Michael V. O'Brien of WinnDevelopment said the price of restoration is extremely high due to poor conditions and the need for historic preservation, but it is potentially a "jewel" for that area.

Kennedy said the city is in danger of losing the building, which is exposed to the elements in several areas, if it's not restored in the near future.

Negotiations are ongoing, and happening as a bill is being sent to Connecticut Governor Dannel Malloy allowing the state's two federally recognized tribes to open a casino in East Windsor to compete with the MGM resort casino.

Fenton said additional meetings will be needed before the council grants its nod of approval, paving the way for the historic Elm Street building's redevelopment.